Europe Advances on Numico, Miners

Ivaylo
09 Jul, 2001
New York City

European markets advanced on Monday buoyed by the strong U.S. finish on Friday and upbeat markets in Asia and as mining companies surged. Bid talks surrounding Dutch baby foods group Numico also supported the markets. British engine maker Rolls-Royce also gained on talks that International Lease Finance will use its engines in 40 of the 74 Boeing 787. The U.K. FTSE 100 index rose 0.4%, the German DAX Xetra 30 index advanced 0.6% and the French CAC-40 index edged up 0.3%.

[R]6:30AM European stocks markets gain on miners, Numico, Rolls-Royce.[/R]

European markets were higher in mid-day on Monday. The U.K. FTSE 100 index rose 0.4% at 6,719.40, the German DAX Xetra 30 index advanced 0.6% at 8,098.43 and the French CAC-40 index inched up 0.3% at 6,121.22. National benchmarks advanced in all of the 17 western European markets that were open, except Spain.

Advancers

Numico, Dutch baby foods group, soared to a six-year high amid reports that Danone of France was mulling a bid. PepsiCo was another name in the frame. Numico shares were up 11.4% in late morning trade. Univar NV, the largest distributor of chemicals in the U.S., surged 36 % to 53 euros after CVC Capital Partners offered to buy the company.

BHP, the world biggest mining company, climbed 1.1%. ThyssenKrupp AG advanced 1.8%. Deutsche Bank upped its price projection on shares of the largest steelmaker in Germany to 54 euros from 45.

Telekom Austria jumped 4.3%. The phone company improved its profit forecast through 2010, on higher earnings at its international mobile unit and cost cuts to compensate for European Union regulations.

Decliners

Bovis Homes Group sank 7.4%. The U.K. homebuilder may reduce its full-year sales target as higher interest rates and mortgage costs led to a decline in the number of potential buyers visiting sites.

In broker news, shares in U.K. clothing retailer Next lost 1.1% after it was downgraded to underweight from neutral by HSBC.

Commodities

Crude oil declined from near a 10-month high in New York. Crude oil for August delivery shed 80 cents, or 1.1%, to $72.01 a barrel in after-hours electronic trading on the New York Mercantile Exchange. Brent crude for August settlement fell as much as 71 cents, or 0.9%, to $74.91 a barrel on the ICE Futures exchange.

Gold rose in London on speculation higher prices may revive demand for the metal as a hedge against inflation. Gold for immediate delivery gained $1.08, or 0.2%, to $656.97 an ounce. Silver added 2 cents to $12.75 an ounce.

Copper rose to the highest in almost two months as workers at Dona Ines de Collahuasi, third- largest mine in Chile that produces the metal, plan to go on strike. Copper for delivery in three months gained $85, or 1.1%, to $7,945 a metric ton on the London Metal Exchange.

Currencies

The U.S. dollar was lower against other major currencies in European trading Monday morning. The euro traded at $1.3631, up from $1.3621 late Friday. The British pound traded at $2.0140, up from $2.0106. The dollar bought 123.29 Japanese yen, down from 123.40.

[R]5:30AM Gold gains Friday as dollar weakens, oil surges on Nigeria turmoil.[/R]

August gold advanced to $654.80, up $4.20 an ounce on the New York Mercantile Exchange. September silver settled at $12.757, up 17.7 cents an ounce and September copper finished at $3.5945, up 0.1 cent a pound. Copper prices retreated from early gains tracking reports of decreasing inventories held by both the London Metal Exchange and Shanghai Futures Exchange, which posted a third-straight week of declines. Nickel prices lost 2.2% on the London Metal Exchange, while the other industrial metals edged higher.

Crude prices reached $72.94 a barrel in intraday trading on the Nymex over worries about renewed violence in Nigeria. Crude oil for August delivery gained $1 to settle at $72.81. Gasoline futures rallied 2.53 cents to end at $2.3096 a gallon, while a flooded refinery in Coffeyville, Kan., remained closed.

On the Chicago Board of Trade, weather forecasts for hotter, drier weather in the western Corn Belt supported corn prices in its recovery from the tumble of recent weeks. December corn advanced 9.4 cents a bushel to end at $3.52. November soybeans rose 9.4 cents to close at $8.96 a bushel. September wheat gained 6 cents to settle at $6.10 a bushel.